Economy, Business And Markets

Danish Drugmaker’s Big Ambitions in Iran

Danish Drugmaker’s Big Ambitions in IranDanish Drugmaker’s Big Ambitions in Iran

Many foreign firms have been hunting for economic opportunities in Iran following the July 14 nuclear deal with the world powers, which will soon see the removal of sanctions against the country.

Denmark’s Novo Nordisk, the world’s biggest producer of insulin, was among the first of these companies to make a move back in September when it announced plans to invest $78 million for the establishment of a factory in Iran for producing insulin and other diabetes-related drugs.

The venture, which will expand the company’s access to about 5 million Iranians suffering from diabetes, is expected to create 160 jobs.

With around 9% of the population suffering from diabetes, Iran represents a huge market for insulin. Presently, around 65-70% of the insulin requirements are imported, so it makes sense to establish local manufacturing facilities to cater to this huge market.

Novo Nordisk has been manufacturing in Iran through a local partner since 2002, serving about 700,000 Iranian diabetics through its manufacturing partnership. However, the latest plan would see the first among giant pharmaceutical firms to set up its own factory in Iran.

CEO of Novo Nordisk Lars Rebien Sorensen, who recently visited Tehran to further explore avenues of cooperation and investment, was interviewed by Financial Tribune’s sister newspaper, Donya-e-Eqtesad, expounding on his outlook toward investment in Iran.

“Iran’s large population and lucrative healthcare and medical sector’s market will attract many foreign investors. Furthermore, Iran has a great standing in pharmaceutical exports in the region. If investors get a taste of success here, a great opportunity will arise for the country to significantly ramp up its exports to its neighboring countries,” he said.

Sorensen has been hailed as the world’s top-performing CEO in Harvard Business Review’s November issue.

According to the CEO, transparency in policymaking and predictability of the country’s economy are the foreign investors’ main demand from Iranian officials.

“What we ask of Iran is to open up its gates to the West and let investors enter the country confidently. This is only possible through making the rules and regulations more transparent and also bringing the country’s economy to a more predictable level,” he said, adding that if Novo Nordisk succeeds in Iran, others will follow.

Sorensen underlined that western sanctions have hindered Novo Nordisk’s operations in Iran so far, as banking and trade limitations have made it considerably difficult to obtain production machinery, which increases production costs.

The lifting of the sanctions will significantly help Novo Nordisk with its operations in Iran.

“It is good for Iranian patients and for the Iranian society, because we will create jobs and bring in modern technology and processes. And also, it is good for Novo Nordisk, because Iran is a big market,” said Ole Moselskov Bech, head of Novo Nordisk in the Near East Region.

The Bagsvaerd-based firm was founded in the 1920s with the purpose of manufacturing the newly discovered insulin drug. Currently, close to 400 million people are suffering from diabetes worldwide, and Novo Nordisk supplies more than half of the world’s insulin.